Monday, August 15, 2011

Are popular liquor brands really cheaper in PA?

The Pennsylvania LCB is claiming that some of the state store's best selling items are significantly cheaper in PA than in neighboring states. The Board is trying to demonstrate that state stores have better pricing than residents like to believe and that the idea of cheaper liquor in neighboring states is in fact just a myth. But their evidence begs the question: Will PA residents really pay more for their "favorites" if liquor stores are privatized or are these brands popular in PA simply because they're cheap here? If selection increases & prices decrease with privatization, as supporters predict, then it makes sense to assume that the preferences of consumers will change accordingly.



The Patriot-News reports that "a spot check of stores in neighboring states revealed many charge more for Pennsylvania’s top-selling brands or do not carry many of them." Now, this information comes from the union representing thousands of state store employees so any data they present is assumed to be hand-picked to present the best possible argument against privatization. Potential for bias aside though, the claim begs the question: Why are Pennsylvanians such connoiseurs of products not available for sale in NY, NJ, MD, DE, OH and WV?

Are our preferences so very sophisticated (or so very unsophisticated) that seven of our neighboring states don't even carry "many" of these products? That seems extraordinarily odd. If Pennsylvanians are imbibing largely in wines and spirits not available elsewhere in this part of the country, then we are a shocking exclusive bunch. It makes far more sense that price and availability of products dictate our purchasing habits more than personal preferences do, considering that PA is the only state in the group with an arcane government monopoly on all wines and liquors. This is a classic chicken-or-egg scenario: Are these brands actually liked by Pennsylvanians or are they best sellers simply because they're cheap? My vote goes to cheap.

This is a specious argument against privatization because nobody else around is even selling these products yet they're the top sellers in PA. Our taste in wines and spirits isn't so drastically different that retailers in other states don't even bother to stock the products we buy en masse. It's much more likely that what Pennsylvanians want and what they buy are simply unrelated. We buy these products because our choices are limited and they're the cheapest of the available options. The PLCB wants to present this as though it's performing some great service when in reality all they're doing is preventing consumer choice.





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